Sarasota Tennis Club Holdings v. Country Club of Sarasota Homeowners Ass'n, Inc.

378 So.3d 1263

SARASOTA TENNIS CLUB HOLDINGS, LLC, Appellant,

v.COUNTRY CLUB OF SARASOTA HOMEOWNERS ASSOCIATION, INC., and Mary Louise Gerritsen, Appellees.

No. 2D22-2358

District Court of Appeal of Florida, Second District.

February 2, 2024

Appeal from the Circuit Court for Sarasota County; Andrea McHugh, Judge.

Elliot B. Kula and W. Aaron Daniel of Kula and Associates, P.A., Miami, for Appellant.

Elaine D. Walter and Yvette R. Lavelle of Boyd, Richards, Parker, Colonnelli, P.L., Miami, for Appellees.

LUCAS, Judge.

Sarasota Tennis Club Holdings, LLC (the Tennis Club), appeals a final summary judgment entered on its complaint against Country Club of Sarasota Homeowners Association, Inc. (the HOA), and Mary Louise Gerritsen. We affirm in part and reverse in part.

The Tennis Club owns a parcel within the Country Club of Sarasota residential community on which it operates a for-profit tennis club. Pursuant to a 1992 maintenance agreement between the Tennis Club’s predecessor and the HOA, the Tennis Club agreed to limit its activities on its property to those normally associated with a tennis club. The maintenance agreement also granted the HOA a right of first refusal to purchase the Tennis Club’s property, which reads: "The Homeowners Association has the right of first refusal to permit the Homeowners Association to purchase the Tennis Club property at some point in the future should the Tennis Club elect to sell or file for bankruptcy."

In addition to the maintenance agreement, in 1992, the Tennis Club’s predecessor and the HOA entered into a drainage agreement, which, in pertinent part, provides: "[The HOA] acknowledges that BAY VENTURE [the Tennis Club’s predecessor], its successor or assigns may petition Sarasota County to rezone the tennis and clubhouse facilities area …. [The HOA] hereby agrees that it shall not challenge a petition for such rezoning oh any drainage-related issue."

In 2016, the HOA filed a civil action against the Tennis Club, alleging that the Tennis Club had breached these two agreements. The HOA sought both injunctive and monetary relief. While that litigation was pending, the Tennis Club sought to sell its property.

On August 28, 2017, the Tennis Club and a developer, Taylor Morrison Homes, entered into a purchase and sale agreement for the Tennis Club’s property for $3,500,000. The HOA waived its right of first refusal through a letter its counsel sent, to the Tennis Club on October 13, 2017. However, according to the Tennis Club, Ms. Gerritsen and five other board members began "secretly" discussing how the HOA might nevertheless be able to purchase the Tennis Club’s property. There is record evidence that these individuals conducted closed board meetings on this issue and directed the HOA’s property manager not to approve any minutes concerning any of these closed meetings, who instead notated "that the minutes were not completed at this time."

On November 6, 2017, the HOA sent a letter to the Tennis Club and Taylor Morrison claiming that an extension on the closing that had been extended to Taylor Morrison (apparently, due to Hurricane Irma) constituted a "material term" which "restarted" the HOA’s right of first refusal. The November , 6 letter accused Taylor Morrison of keeping "the Association in the dark" about this extension and admonished "Taylor Morrison and their representatives [to] conduct themselves in a straightforward manner." The final paragraph of the November 6 letter stated that the HOA was "reviewing whether the Association would be willing to waive the deed restriction contained in paragraph 5 of the 1992 [maintenance] agreement allowing for a different use than that which is contained therein."

There is, however, no such deed restriction.¹ Ten days later. Taylor Morrison withdrew from its agreement with the Tennis Club. When asked in deposition why Taylor Morrison refused to close, its representative testified that, among other issues, there were "outstanding issues be- tween the seller [the Tennis Club] and the association." The representative was pointedly asked whether, if it weren’t for the "issue" between the Tennis Club and the HOA, would Taylor Morrison have closed on its contract with the Tennis Club. Notably, the representative did not respond "no," but rather: "That’s difficult to say …."

In February 2018, the Tennis Club negotiated a second purchase and sale agreement, this time in the amount of $2.3 million for a portion of its property, with Robert Mitchell. The agreement with Mr. Mitchell included a put option to convey the remaining Tennis Club property (about 5.4 acres) for $1.2 million.

Shortly after the Tennis Club notified the HOA of this new agreement, the HOA convened a special meeting. In communicating with the residents of the Country Club of Sarasota, the HOA misstated the scope of development being proposed and that the HOA’s right of first refusal encompassed the entire Tennis Club Property (when, in fact, that was not how the purchase and sale agreement between the Tennis Club and Mr. Mitchell was structured). The Tennis Club’s president testified in deposition that Mr. Mitchell became "very nervous" that he was "buying a lawsuit" with the HOA if he were to close. Ultimately, Mr. Mitchell elected not to close on his contract with the Tennis Club. His attorney sent correspondence to the Tennis Club, which stated: "In reviewing the letter of [HOA’s counsel], it is abundantly clear that litigation would be instituted if the HOA were not presented with these changes and provided their first refusal rights." Shortly afterwards, the HOA approached the Tennis Club about purchasing the Tennis Club’s property at a lower price than what the Tennis Club had negotiated with Mr. Mitchell.

In 2019 the Tennis Club filed a rezoning petition with Sarasota County to pursue residential development on its property. Upon learning of the petition, one of the HOA board members, Claudia Hurley, wrote an email to Heritage Group, the property owner abutting the Tennis Club’s property. The email was copied to the HOA’s property manager, board president, and board member Ms. Gerritsen. In this email, Ms. Hurley stated:

We feel that the proposed rezone petition could have a negative effect on [the golf course property] in ways we enumerated yesterday.

We have discussed the stormwater issues that could have an impact on the golf course (should excess runoff drain onto the course), or should it be necessary for the applicant to enlarge or dredge the stormwater ponds that you own for increased capacity. We have a suggestion, which we respectfully offer:

Is it possible that Heritage Group could make a preemptive statement and submit it to the county before the April 18 public hearing, something along these lines:

"It is the recommendation of the Heritage Group that if additional development is approved on the Tennis Club Property that the property provide a stormwater retention pond, on the development property."

Later, Ms. Hurley sent other emails on this same topic to the Heritage Group, stating the HOA "is concerned with drainage issues on the proposed rezone site, especially now that it includes the full 11.3 acres."

Ultimately, the Tennis Club withdrew its rezoning application with Sarasota County.

In November of 2019, the Tennis Club filed a complaint against the HOA and Ms. Gerritsen, generally alleging that the HOAand five of its directors (including Ms. Gerritsen) were responsible for the Tennis Club’s inability to sell its property to Taylor Morrison or to Mr. Mitchell. The Tennis Club further claimed that the HOA, through Ms. Hurley, effectively breached the 1992 maintenance agreement which precluded the HOA from "challeng[ing] a petition for such rezoning on any drainage-related issue." In the Tennis Club’s operative complaint, count I alleged tortious interference; count II asserted a claim that the HOA violated the Florida Deceptive and Unfair Trade Practices Act (FDUTPA); count III was for breach of contract (based on the 1992 maintenance agreement); and count IV sought declaratory judgment about whether there was a contractual basis to recover, attorney’s fees.

The parties engaged in discovery, and on January 21, 2022, the HOA and Ms. Gerritsen filed a motion for summary judgment as to all the counts of the complaint. On June 24, 2022, the circuit court entered a final summary judgment against the Tennis Club. As to count I, the court concluded that the Tennis Club’s evidence was insufficient to show that the failure of either Taylor Morrison or Mr. Mitchell to close on their respective contracts with the Tennis Club was due to the defendants’ actions. Similarly, the court found there was insufficient evidence of causation to prove a violation of FDUTPA. As to count III, the court determined that the Tennis Club failed...